Table of Contents

 

 

 

United States

Securities and Exchange Commission

Washington, D.C. 20549

 

FORM 6-K

 

Report of Foreign Private Issuer

Pursuant to Rule 13a-16 or 15d-16

of the

Securities Exchange Act of 1934

 

For the month of

 

October 2018

 

Vale S.A.

 

Praia de Botafogo, 186
22250-145 Rio de Janeiro, RJ, Brazil

(Address of principal executive office)

 

(Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.)

 

 

(Check One) Form 20-F x  Form 40-F o

 

(Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1))

 

 

(Check One) Yes o  No x

 

(Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7))

 

 

(Check One) Yes o  No x

 

(Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.)

 

 

(Check One) Yes o  No x

 

(If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b). 82-   .)

 

 

 



Table of Contents

 

 

Interim Financial Statements

September 30, 2018

 

 

BRGAAP in R$ (English)

 


Table of Contents

 

 

Vale S.A. Interim Financial Statements

Contents

 

 

Page

Report on the review of the quarterly information - ITR

3

Consolidated and Parent Company Income Statement

5

Consolidated and Parent Company Statement of Comprehensive Income

7

Consolidated and Parent Company Statement of Cash Flows

8

Consolidated and Parent Company Statement of Financial Position

10

Consolidated Statement of Changes in Equity

11

Consolidated and Parent Company Value Added Statement

12

Selected Notes to the Interim Financial Statements

13

1. Corporate information

13

2. Basis for preparation of the interim financial statements

13

3. Information by business segment and by geographic area

17

4. Special events occurred during the period

22

5. Costs and expenses by nature

23

6. Financial results

24

7. Income taxes

24

8. Basic and diluted earnings (loss) per share

26

9. Accounts receivable

26

10. Inventories

26

11. Other financial assets and liabilities

27

12. Non-current assets and liabilities held for sale and discontinued operations

27

13. Investments in associates and joint ventures

29

14. Intangibles

31

15. Property, plant and equipment

32

16. Loans, borrowings, cash and cash equivalents and financial investments

32

17. Liabilities related to associates and joint ventures

35

18. Financial instruments classification

36

19. Fair value estimate

36

20. Derivative financial instruments

38

21. Provisions

39

22. Litigation

40

23. Employee postretirement obligations

43

24. Stockholders’ equity

44

25. Related parties

45

26. Parent Company information (individual interim information)

46

27. Additional information about derivative financial instruments

49

 

2


Table of Contents

 

 

KPMG Auditores Independentes

Rua do Passeio, 38 - Setor 2 - 17º andar - Centro

20021-290 - Rio de Janeiro/RJ - Brasil

Caixa Postal 2888 - CEP 20001-970 - Rio de Janeiro/RJ - Brasil

Telefone +55 (21) 2207-9400, Fax +55 (21) 2207-9000

www.kpmg.com.br

Report on the review of quarterly information — ITR

 

(A free translation of the original report in Portuguese, as filed with the Brazilian Securities and Exchange Commission (CVM), prepared in accordance with the accounting practices adopted in Brazil, rules of the CVM and of the International Financial Reporting Standards - IFRS)

 

To the Board of Directors and Stockholders of

Vale S.A.

Rio de Janeiro - RJ

 

Introduction

 

1.                    We have reviewed the interim financial information, individual and consolidated, of Vale S.A. (“the Company”), identified as Parent Company and Consolidated, respectively, included in the quarterly information form - ITR for the quarter ended September 30, 2018, which comprises the individual and consolidated statement of financial position as of September 30, 2018 and the respective statements of income and comprehensive income for the three and nine months periods ended on September 30, 2018, the statements of changes in equity for the nine-month period then ended and of the individual statement of cash flows for the nine-month period and the consolidated statements of cash flows for the three and nine months periods then ended, including the explanatory notes.

 

2.                    The Company`s Management is responsible for the preparation of these interim financial information in accordance with the CPC 21(R1) — Demonstração Intermediária and the IAS 34 - Interim Financial Reporting, issued by the International Accounting Standards Board — IASB, as well as the presentation of these information in accordance with the standards issued by the Brazilian Securities and Exchange Commission, applicable to the preparation of quarterly information - ITR. Our responsibility is to express our conclusion on this interim financial information based on our review.

 

KPMG Auditores Independentes, uma sociedade simples brasileira e firma-membro da rede KPMG de firmas-membro independentes e afiliadas à KPMG International Cooperative (“KPMG International”), uma entidade suíça.

KPMG Auditores Independentes, a Brazilian entity and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity.

 

3


Table of Contents

 

Scope of the review

 

3.                    We conducted our review in accordance with Brazilian and International Interim Information Review Standards (NBC TR 2410 - Revisão de Informações Intermediárias Executada pelo Auditor da Entidade and ISRE 2410 - Review of Interim Financial Information Performed by the Independent Auditor of the Entity, respectively). A review of interim information consists of making inquiries primarily of the management responsible for financial and accounting matters and applying analytical procedures and other review procedures. The scope of a review is significantly less than an audit conducted in accordance with auditing standards and, accordingly, it did not enable us to obtain assurance that we were aware of all the material matters that would have been identified in an audit. Therefore, we do not express an audit opinion.

 

Conclusion on the interim financial information

 

4.                    Based on our review, we are not aware of any fact that might lead us to believe that the individual and consolidated interim financial information included in the aforementioned quarterly information was not prepared, in all material respects, in accordance with CPC 21(R1) and IAS 34, issued by the IASB, applicable to the preparation of the quarterly review - ITR, and presented in accordance with the standards issued by the Brazilian Securities and Exchange Commission.

 

Other matters

 

Statements of added value

 

5.                    The individual and consolidated interim financial information related to the statement of value added for the nine-month period ended September 30, 2018, prepared under the responsibility of the Company’s management, and presented as supplementary information for the purposes of IAS 34, was submitted to the same review procedures followed together with the review of the Company’s interim financial information. In order to form our conclusion, we evaluated whether this statement was reconciliated to the interim financial information and to the accounting records, as applicable, and whether their form and content are in accordance with the criteria set on Technical Pronouncement CPC 09 - Statement of Value Added. Based on our review, nothing has come to our attention that causes us to believe that the accompanying statement of value added was not prepared, in all material respects, in accordance with the individual and consolidated interim financial information taken as a whole.

 

Rio de Janeiro, October 24, 2018

 

KPMG Auditores Independentes

CRC SP-014428/O-6 F-RJ

(Original report in Portuguese signed by)

Bernardo Moreira Peixoto Neto

Accountant CRC RJ-064887/O-8

 

4


 


Table of Contents

 

 

Income Statement

In millions of Brazilian reais, except earnings per share data

 

 

 

 

 

Consolidated

 

 

 

 

 

Three-month period ended
September 30,

 

Nine-month period ended
September 30,

 

 

 

Notes

 

2018

 

2017

 

2018

 

2017

 

Continuing operations

 

 

 

 

 

 

 

 

 

 

 

Net operating revenue

 

3(c)

 

37,862

 

28,600

 

97,028

 

78,705

 

Cost of goods sold and services rendered

 

5(a)

 

(22,827

)

(17,099

)

(59,260

)

(48,426

)

Gross profit

 

 

 

15,035

 

11,501

 

37,768

 

30,279

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating expenses

 

 

 

 

 

 

 

 

 

 

 

Selling and administrative expenses

 

5(b)

 

(535

)

(409

)

(1,377

)

(1,223

)

Research and evaluation expenses

 

 

 

(346

)

(285

)

(899

)

(748

)

Pre operating and operational stoppage

 

 

 

(241

)

(265

)

(736

)

(915

)

Other operating expenses, net

 

5(c)

 

(244

)

(484

)

(1,042

)

(1,002

)

 

 

 

 

(1,366

)

(1,443

)

(4,054

)

(3,888

)

Impairment and other results on non-current assets

 

4

 

(707

)

(532

)

(749

)

345

 

Operating income

 

 

 

12,962

 

9,526

 

32,965

 

26,736

 

 

 

 

 

 

 

 

 

 

 

 

 

Financial income

 

6

 

445

 

482

 

1,114

 

1,054

 

Financial expenses

 

6

 

(1,479

)

(2,393

)

(6,320

)

(7,959

)

Other financial items

 

6

 

(3,924

)

2,665

 

(12,753

)

1,424

 

Equity results in associates and joint ventures

 

13

 

134

 

367

 

584

 

509

 

Impairment and other results in associates and joint ventures

 

17

 

(80

)

(78

)

(1,671

)

(379

)

Income before income taxes

 

 

 

8,058

 

10,569

 

13,919

 

21,385

 

 

 

 

 

 

 

 

 

 

 

 

 

Income taxes

 

7

 

 

 

 

 

 

 

 

 

Current tax

 

 

 

280

 

(1,654

)

(475

)

(3,461

)

Deferred tax

 

 

 

(2,730

)

(1,407

)

(2,021

)

(1,660

)

 

 

 

 

(2,450

)

(3,061

)

(2,496

)

(5,121

)

 

 

 

 

 

 

 

 

 

 

 

 

Net income from continuing operations

 

 

 

5,608

 

7,508

 

11,423

 

16,264

 

Net income (loss) attributable to noncontrolling interests

 

 

 

(145

)

19

 

(58

)

166

 

Net income from continuing operations attributable to Vale’s stockholders

 

 

 

5,753

 

7,489

 

11,481

 

16,098

 

 

 

 

 

 

 

 

 

 

 

 

 

Discontinued operations

 

12

 

 

 

 

 

 

 

 

 

Loss from discontinued operations

 

 

 

 

(338

)

(310

)

(983

)

Net income attributable to noncontrolling interests

 

 

 

 

8

 

 

21

 

Loss from discontinued operations attributable to Vale’s stockholders

 

 

 

 

(346

)

(310

)

(1,004

)

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

 

 

5,608

 

7,170

 

11,113

 

15,281

 

Net income (loss) attributable to noncontrolling interests

 

 

 

(145

)

27

 

(58

)

187

 

Net income attributable to Vale’s stockholders

 

 

 

5,753

 

7,143

 

11,171

 

15,094

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per share attributable to Vale’s stockholders:

 

 

 

 

 

 

 

 

 

 

 

Basic and diluted earnings per share (restated):

 

8

 

 

 

 

 

 

 

 

 

Common share (R$)

 

 

 

1.11

 

1.37

 

2.15

 

2.90

 

 

The accompanying notes are an integral part of these interim financial statements.

 

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Table of Contents

 

 

Income Statement

In millions of Brazilian reais, except earnings per share data

 

 

 

Parent company

 

 

 

Three-month period ended
September 30,

 

Nine-month period ended
September 30,

 

 

 

2018

 

2017

 

2018

 

2017

 

Continuing operations

 

 

 

 

 

 

 

 

 

Net operating revenue

 

22,728

 

14,369

 

56,860

 

47,033

 

Cost of goods sold and services rendered

 

(10,318

)

(8,335

)

(28,299

)

(24,424

)

Gross profit

 

12,410

 

6,034

 

28,561

 

22,609

 

 

 

 

 

 

 

 

 

 

 

Operating (expenses) income

 

 

 

 

 

 

 

 

 

Selling and administrative expenses

 

(242

)

(229

)

(694

)

(690

)

Research and evaluation expenses

 

(210

)

(171

)

(549

)

(444

)

Pre operating and operational stoppage

 

(179

)

(256

)

(562

)

(660

)

Equity results from subsidiaries

 

531

 

3,224

 

4,104

 

4,840

 

Other operating expenses, net

 

(286

)

(438

)

(836

)

(523

)

 

 

(386

)

2,130

 

1,463

 

2,523

 

Impairment and other results on non-current assets

 

(81

)

(258

)

(305

)

(326

)

Operating income

 

11,943

 

7,906

 

29,719

 

24,806

 

 

 

 

 

 

 

 

 

 

 

Financial income

 

95

 

89

 

209

 

302

 

Financial expenses

 

(1,508

)

(1,968

)

(6,079

)

(7,477

)

Other financial items

 

(3,316

)

2,988

 

(11,936

)

2,120

 

Equity results in associates and joint ventures

 

134

 

367

 

584

 

509

 

Impairment and other results in associates and joint ventures

 

(80

)

(78

)

(1,671

)

(370

)

Income before income taxes

 

7,268

 

9,304

 

10,826

 

19,890

 

 

 

 

 

 

 

 

 

 

 

Income taxes

 

 

 

 

 

 

 

 

 

Current tax

 

774

 

(1,278

)

774

 

(2,344

)

Deferred tax

 

(2,289

)

(537

)

(119

)

(1,448

)

 

 

(1,515

)

(1,815

)

655

 

(3,792

)

Net income from continuing operations

 

5,753

 

7,489

 

11,481

 

16,098

 

 

 

 

 

 

 

 

 

 

 

Discontinued operations

 

 

 

 

 

 

 

 

 

Loss from discontinued operations

 

 

(346

)

(310

)

(1,004

)

Net income

 

5,753

 

7,143

 

11,171

 

15,094

 

 

 

 

 

 

 

 

 

 

 

Earnings per share attributable to Vale’s stockholders:

 

 

 

 

 

 

 

 

 

Basic and diluted earnings per share (restated):

 

 

 

 

 

 

 

 

 

Common share (R$)

 

1.11

 

1.37

 

2.15

 

2.90

 

 

The accompanying notes are an integral part of these interim financial statements.

 

6


Table of Contents

 

 

Statement of Comprehensive Income

In millions of Brazilian reais

 

 

 

Consolidated

 

 

 

Three-month period ended
September 30,

 

Nine-month period ended
September 30,

 

 

 

2018

 

2017

 

2018

 

2017

 

Net income

 

5,608

 

7,170

 

11,113

 

15,281

 

Other comprehensive income (loss):

 

 

 

 

 

 

 

 

 

Items that will not be reclassified subsequently to the income statement

 

 

 

 

 

 

 

 

 

Retirement benefit obligations

 

144

 

142

 

112

 

(573

)

Fair value adjustment to investment in equity securities

 

702

 

 

873

 

 

Transfer to retained earnings

 

 

 

(51

)

 

Total of items that will not be reclassified subsequently to the income statement, net of tax

 

846

 

142

 

934

 

(573

)

 

 

 

 

 

 

 

 

 

 

Items that may be reclassified subsequently to the income statement

 

 

 

 

 

 

 

 

 

Translation adjustments

 

4,854

 

(2,523

)

19,823

 

(414

)

Net investments hedge

 

(308

)

616

 

(2,338

)

339

 

Transfer of realized results to net income

 

 

 

(257

)

 

Total of items that may be reclassified subsequently to the income statement, net of tax

 

4,546

 

(1,907

)

17,228

 

(75

)

Total comprehensive income

 

11,000

 

5,405

 

29,275

 

14,633

 

 

 

 

 

 

 

 

 

 

 

Comprehensive income (loss) attributable to noncontrolling interests

 

(176

)

(118

)

142

 

74

 

Comprehensive income attributable to Vale’s stockholders

 

11,176

 

5,523

 

29,133

 

14,559

 

From continuing operations

 

11,176

 

5,571

 

29,117

 

14,607

 

From discontinued operations

 

 

(48

)

16

 

(48

)

 

 

11,176

 

5,523

 

29,133

 

14,559

 

 

 

 

Parent company

 

 

 

Three-month period ended
September 30,

 

Nine-month period ended
September 30,

 

 

 

2018

 

2017

 

2018

 

2017

 

Net income

 

5,753

 

7,143

 

11,171

 

15,094

 

Other comprehensive income:

 

 

 

 

 

 

 

 

 

Items that will not be reclassified subsequently to the income statement

 

 

 

 

 

 

 

 

 

Retirement benefit obligations

 

32

 

(26

)

(5

)

(53

)

Fair value adjustment to investment in equity securities

 

621

 

 

770

 

 

Equity results in associates and joint ventures

 

193

 

168

 

220

 

(520

)

Transfer to retained earnings

 

 

 

(51

)

 

Total of items that will not be reclassified subsequently to the income statement, net of tax

 

846

 

142

 

934

 

(573

)

 

 

 

 

 

 

 

 

 

 

Items that may be reclassified subsequently to the income statement

 

 

 

 

 

 

 

 

 

Translation adjustments

 

4,885

 

(2,378

)

19,478

 

(301

)

Net investments hedge

 

(308

)

616

 

(2,338

)

339

 

Transfer of realized results to net income

 

 

 

(112

)

 

Total of items that may be reclassified subsequently to the income statement, net of tax

 

4,577

 

(1,762

)

17,028

 

38

 

Total comprehensive income

 

11,176

 

5,523

 

29,133

 

14,559

 

 

Items above are stated net of tax and the related taxes are disclosed in note 7.

 

The accompanying notes are an integral part of these interim financial statements.

 

7


Table of Contents

 

 

Statement of Cash Flows

In millions of Brazilian reais

 

 

 

Consolidated

 

 

 

Three-month period ended
September 30,

 

Nine-month period ended
September 30,

 

 

 

2018

 

2017

 

2018

 

2017

 

 

 

 

 

 

 

 

 

 

 

Cash flow from operating activities:

 

 

 

 

 

 

 

 

 

Income before income taxes from continuing operations

 

8,058

 

10,569

 

13,919

 

21,385

 

Continuing operations adjustments for:

 

 

 

 

 

 

 

 

 

Equity results in associates and joint ventures

 

(134

)

(367

)

(584

)

(509

)

Impairment and other results on non-current assets and associates and joint ventures

 

787

 

610

 

2,420

 

34

 

Depreciation, amortization and depletion

 

3,376

 

2,916

 

9,322

 

8,674

 

Financial results, net

 

4,958

 

(754

)

17,959

 

5,481

 

Changes in assets and liabilities:

 

 

 

 

 

 

 

 

 

Accounts receivable

 

(708

)

(3,075

)

(78

)

3,420

 

Inventories

 

(721

)

(173

)

(1,453

)

(1,488

)

Suppliers and contractors

 

1,295

 

113

 

(82

)

1,162

 

Provision - Payroll, related charges and other remunerations

 

789

 

632

 

(238

)

539

 

Proceeds from cobalt stream transaction

 

 

 

2,603

 

 

Other assets and liabilities, net

 

81

 

(855

)

(1,734

)

(2,824

)

 

 

17,781

 

9,616

 

42,054

 

35,874

 

Interest on loans and borrowings paid

 

(972

)

(1,289

)

(3,203

)

(4,235

)

Derivatives paid, net

 

(84

)

(361

)

(127

)

(714

)

Interest on participative stockholders’ debentures paid

 

 

 

(245

)

(221

)

Income taxes

 

(867

)

(282

)

(1,808

)

(1,539

)

Income taxes - Settlement program

 

(412

)

(393

)

(1,225

)

(1,159

)

Net cash provided by operating activities from continuing operations

 

15,446

 

7,291

 

35,446

 

28,006

 

 

 

 

 

 

 

 

 

 

 

Cash flow from investing activities:

 

 

 

 

 

 

 

 

 

Financial investments invested

 

(76

)

(124

)

(156

)

(176

)

Loans and advances - net receipts (payments) (note 25)

 

(341

)

(324

)

7,955

 

(1,059

)

Additions to property, plant and equipment, intangibles and investments

 

(2,737

)

(2,930

)

(8,238

)

(9,275

)

Proceeds from disposal of assets and investments (note 12 and 13)

 

476

 

624

 

4,937

 

2,266

 

Dividends and interest on capital received from associates and joint ventures

 

28

 

64

 

566

 

330

 

Other investing activities

 

(97

)

7

 

(105

)

(95

)

Net cash provided by (used in) investing activities from continuing operations

 

(2,747

)

(2,683

)

4,959

 

(8,009

)

 

 

 

 

 

 

 

 

 

 

Cash flow from financing activities:

 

 

 

 

 

 

 

 

 

Loans and borrowings

 

 

 

 

 

 

 

 

 

Additions

 

827

 

1,115

 

3,641

 

5,654

 

Repayments

 

(4,537

)

(8,895

)

(21,350

)

(18,327

)

Transactions with stockholders:

 

 

 

 

 

 

 

 

 

Dividends and interest on capital paid to stockholders

 

(7,694

)

 

(12,415

)

(4,660

)

Dividends and interest on capital paid to noncontrolling interests

 

(315

)

(372

)

(625

)

(395

)

Share buyback program (note 24)

 

(1,939

)

 

(1,939

)

 

Transactions with noncontrolling stockholders

 

 

 

(56

)

(305

)

Net cash used in financing activities from continuing operations

 

(13,658

)

(8,152

)

(32,744

)

(18,033

)

 

 

 

 

 

 

 

 

 

 

Net cash used in discontinued operations (note 12)

 

 

(56

)

(157

)

(554

)

 

 

 

 

 

 

 

 

 

 

Increase (decrease) in cash and cash equivalents

 

(959

)

(3,600

)

7,504

 

1,410

 

Cash and cash equivalents in the beginning of the period

 

24,557

 

18,922

 

14,318

 

13,891

 

Effect of exchange rate changes on cash and cash equivalents

 

826

 

(380

)

2,987

 

(315

)

Effects of disposals of subsidiaries and merger, net of cash and cash equivalents

 

 

7

 

(385

)

(37

)

Cash and cash equivalents at end of the period

 

24,424

 

14,949

 

24,424

 

14,949

 

 

 

 

 

 

 

 

 

 

 

Non-cash transactions:

 

 

 

 

 

 

 

 

 

Additions to property, plant and equipment - capitalized loans and borrowing costs

 

197

 

351

 

551

 

938

 

 

The accompanying notes are an integral part of these interim financial statements.

 

8


Table of Contents

 

 

Statement of Cash Flows

In millions of Brazilian reais

 

 

 

Parent company

 

 

 

Nine-month period ended September 30,

 

 

 

2018

 

2017

 

 

 

 

 

(Restated)

 

Cash flow from operating activities:

 

 

 

 

 

Income before income taxes from continuing operations

 

10,826

 

19,890

 

Continuing operations adjustments for:

 

 

 

 

 

Equity results in subsidiaries, associates and joint ventures

 

(4,688

)

(5,349

)

Impairment and other results on non-current assets and associates and joint ventures

 

1,976

 

696

 

Depreciation, amortization and depletion

 

4,464

 

4,124

 

Financial results, net

 

17,806

 

5,055

 

Changes in assets and liabilities:

 

 

 

 

 

Accounts receivable

 

(5,094

)

13,517

 

Inventories

 

(254

)

(346

)

Suppliers and contractors

 

1,448

 

81

 

Provision - Payroll, related charges and other remunerations

 

(6

)

483

 

Other assets and liabilities, net

 

1,274

 

80

 

 

 

27,752

 

38,231

 

Interest on loans and borrowings paid

 

(1,440

)

(4,311

)

Derivatives paid, net

 

(288

)

(439

)

Interest on participative stockholders’ debentures paid

 

(245

)

(221

)

Dividends received from interest on capital and associates

 

1,913

 

1,602

 

Income taxes

 

(72

)

(735

)

Income taxes - Settlement program

 

(1,200

)

(1,136

)

Net cash provided by operating activities

 

26,420

 

32,991

 

 

 

 

 

 

 

Cash flow from investing activities:

 

 

 

 

 

Financial investments (invested)

 

(230

)

(195

)

Loans and advances - net receipts (payments)

 

3,667

 

(7,468

)

Additions to property, plant and equipment, intangibles and investments

 

(6,293

)

(7,511

)

Proceeds from disposal of assets and investments (note 12)

 

466

 

21

 

Dividends and interest on capital received from subsidiaries, associates and joint ventures

 

566

 

300

 

Others investing activities

 

(128

)

(87

)

Net cash used in investing activities

 

(1,952

)

(14,940

)

 

 

 

 

 

 

Cash flow from financing activities:

 

 

 

 

 

Loans and borrowings

 

 

 

 

 

Additions

 

3,641

 

1,452

 

Repayments

 

(12,825

)

(12,705

)

Transactions with stockholders:

 

 

 

 

 

Dividends and interest on capital paid to stockholders

 

(12,416

)

(4,660

)

Stock buy-back program

 

(1,939

)

 

Net cash used in financing activities

 

(23,539

)

(15,913

)

 

 

 

 

 

 

Increase in cash and cash equivalents

 

929

 

2,138

 

Cash and cash equivalents in the beginning of the period

 

1,876

 

1,203

 

Effects of disposals of subsidiaries and merger, net of cash and cash equivalents

 

 

7

 

Cash and cash equivalents at end of the period

 

2,805

 

3,348

 

 

 

 

 

 

 

Non-cash transactions:

 

 

 

 

 

Additions to property, plant and equipment - capitalized loans and borrowing costs

 

548

 

938

 

 

The accompanying notes are an integral part of these interim financial statements.

 

9


Table of Contents

 

 

Statement of Financial Position

In millions of Brazilian reais

 

 

 

 

 

Consolidated

 

Parent company

 

 

 

Notes

 

September 30,
2018

 

December 31,
2017

 

September 30,
2018

 

December 31,
2017

 

Assets

 

 

 

 

 

 

 

 

 

 

 

Current assets

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

16

 

24,424

 

14,318

 

2,805

 

1,876

 

Accounts receivable

 

9

 

9,807

 

8,602

 

17,111

 

9,560

 

Other financial assets

 

11

 

1,656

 

6,689

 

350

 

409

 

Inventories

 

10

 

16,238

 

12,987

 

4,855

 

4,601

 

Prepaid income taxes

 

 

 

2,583

 

2,584

 

2,418

 

2,378

 

Recoverable taxes

 

 

 

3,799

 

3,876

 

1,818

 

2,091

 

Others

 

 

 

2,079

 

1,780

 

944

 

1,542

 

 

 

 

 

60,586

 

50,836

 

30,301

 

22,457

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-current assets held for sale

 

12

 

 

11,865

 

 

7,082

 

 

 

 

 

60,586

 

62,701

 

30,301

 

29,539

 

Non-current assets

 

 

 

 

 

 

 

 

 

 

 

Judicial deposits

 

22(c)

 

6,730

 

6,571

 

6,290

 

6,110

 

Other financial assets

 

11

 

12,880

 

10,690

 

5,648

 

1,865

 

Prepaid income taxes

 

 

 

2,246

 

1,754

 

 

 

Recoverable taxes

 

 

 

2,173

 

2,109

 

2,093

 

2,062

 

Deferred income taxes

 

7(a)

 

22,875

 

21,959

 

15,409

 

14,200

 

Others

 

 

 

1,084

 

882

 

1,308

 

810

 

 

 

 

 

47,988

 

43,965

 

30,748

 

25,047

 

 

 

 

 

 

 

 

 

 

 

 

 

Investments

 

13

 

12,598

 

11,802

 

144,521

 

117,387

 

Intangibles

 

14

 

31,190

 

28,094

 

15,254

 

13,471

 

Property, plant and equipment

 

15

 

189,917

 

181,535

 

101,521

 

102,978

 

 

 

 

 

281,693

 

265,396

 

292,044

 

258,883

 

Total assets

 

 

 

342,279

 

328,097

 

322,345

 

288,422

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities

 

 

 

 

 

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

 

 

 

 

 

 

Suppliers and contractors

 

 

 

16,169

 

13,367

 

9,369

 

7,503

 

Loans and borrowings

 

16

 

5,498

 

5,633

 

4,027

 

4,378

 

Other financial liabilities

 

11

 

3,545

 

3,260

 

4,855

 

4,413

 

Taxes payable

 

7(c)

 

2,525

 

2,307

 

2,168

 

1,991

 

Provision for income taxes

 

 

 

637

 

1,175

 

 

 

Liabilities related to associates and joint ventures

 

17

 

1,171

 

1,080

 

1,171

 

1,080

 

Provisions

 

21

 

4,697

 

4,610

 

2,788

 

2,904

 

Dividends and interest on capital

 

 

 

 

4,742

 

 

4,439

 

Others

 

 

 

2,476

 

3,284

 

2,717

 

2,552

 

 

 

 

 

36,718

 

39,458

 

27,095

 

29,260

 

Liabilities associated with non-current assets held for sale

 

12

 

 

3,899

 

 

 

 

 

 

 

36,718

 

43,357

 

27,095

 

29,260

 

Non-current liabilities

 

 

 

 

 

 

 

 

 

 

 

Loans and borrowings

 

16

 

61,808

 

68,759

 

23,625

 

28,966

 

Other financial liabilities

 

11

 

11,284

 

9,575

 

74,882

 

54,955

 

Taxes payable

 

7(c)

 

15,448

 

16,176

 

15,140

 

15,853

 

Deferred income taxes

 

7(a)

 

6,852

 

5,687

 

 

 

Provisions

 

21

 

25,492

 

23,243

 

7,901

 

6,900

 

Liabilities related to associates and joint ventures

 

17

 

3,045

 

2,216

 

3,045

 

2,216

 

Deferred revenue - Gold stream

 

 

 

6,684

 

6,117

 

 

 

Others

 

 

 

8,254

 

4,861

 

7,399

 

6,514

 

 

 

 

 

138,867

 

136,634

 

131,992

 

115,404

 

Total liabilities

 

 

 

175,585

 

179,991

 

159,087

 

144,664

 

 

 

 

 

 

 

 

 

 

 

 

 

Stockholders’ equity

 

24

 

 

 

 

 

 

 

 

 

Equity attributable to Vale’s stockholders

 

 

 

163,258

 

143,758

 

163,258

 

143,758

 

Equity attributable to noncontrolling interests

 

 

 

3,436

 

4,348

 

 

 

Total stockholders’ equity

 

 

 

166,694

 

148,106

 

163,258

 

143,758

 

Total liabilities and stockholders’ equity

 

 

 

342,279

 

328,097

 

322,345

 

288,422

 

 

The accompanying notes are an integral part of these interim financial statements.

 

10



Table of Contents

 

 

Statement of Changes in Equity

In millions of Brazilian reais

 

 

 

Share
capital

 

Results on
conversion
of shares

 

Capital
reserve

 

Results from
operation
with
noncontrolling
interest

 

Profit
reserves

 

Treasury
stocks

 

Unrealized
fair value
gains (losses)

 

Cumulative
translation
adjustments

 

Retained
earnings

 

Equity
attributable
to Vale’s
stockholders

 

Equity
attributable to
noncontrolling
interests

 

Total
stockholders’
equity

 

Balance at December 31, 2017

 

77,300

 

50

 

3,634

 

(2,663

)

24,539

 

(2,746

)

(3,912

)

47,556

 

 

143,758

 

4,348

 

148,106

 

Net income

 

 

 

 

 

 

 

 

 

11,171

 

11,171

 

(58

)

11,113

 

Other comprehensive income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Retirement benefit obligations

 

 

 

 

 

 

 

112

 

 

(51

)

61

 

 

61

 

Net investments hedge

 

 

 

 

 

 

 

 

(2,338

)

 

(2,338

)

 

(2,338

)

Fair value adjustment to investment in equity securities

 

 

 

 

 

 

 

873

 

 

 

873

 

 

873

 

Translation adjustments

 

 

 

 

 

 

 

327

 

19,039

 

 

19,366

 

200

 

19,566

 

Transactions with stockholders:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Dividends and interest on capital of Vale’s stockholders

 

 

 

 

 

 

 

 

 

(7,694

)

(7,694

)

 

(7,694

)

Dividends of noncontrolling interest

 

 

 

 

 

 

 

 

 

 

 

(318

)

(318

)

Acquisitions and disposal of noncontrolling interest

 

 

 

 

 

 

 

 

 

 

 

(756

)

(756

)

Capitalization of noncontrolling interest advances

 

 

 

 

 

 

 

 

 

 

 

20

 

20

 

Share buyback program

 

 

 

 

 

 

(1,939

)

 

 

 

(1,939

)

 

(1,939

)

Balance at September 30, 2018

 

77,300

 

50

 

3,634

 

(2,663

)

24,539

 

(4,685

)

(2,600

)

64,257

 

3,426

 

163,258

 

3,436

 

166,694

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Share
capital

 

Results on
conversion
of shares

 

Capital
reserve

 

Results from
operation
with
noncontrolling
interest

 

Profit
reserves

 

Treasury
stocks

 

Unrealized
fair value
gains (losses)

 

Cumulative
translation
adjustments

 

Retained
earnings

 

Equity
attributable
to Vale’s
stockholders

 

Equity
attributable to
noncontrolling
interests

 

Total
stockholders’
equity

 

Balance at December 31, 2016

 

77,300

 

50

 

 

(1,870

)

13,698

 

(2,746

)

(3,739

)

44,548

 

 

127,241

 

6,461

 

133,702

 

Net income

 

 

 

 

 

 

 

 

 

15,094

 

15,094

 

187

 

15,281

 

Other comprehensive income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Retirement benefit obligations

 

 

 

 

 

 

 

(573

)

 

 

(573

)

 

(573

)

Net investments hedge

 

 

 

 

 

 

 

 

339

 

 

339

 

 

339

 

Translation adjustments

 

 

 

 

 

 

 

72

 

(373

)

 

(301

)

(113

)

(414

)

Transactions with stockholders:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Dividends and interest on capital of Vale’s stockholders

 

 

 

 

 

(2,064

)

 

 

 

 

(2,064

)

 

(2,064

)

Dividends of noncontrolling interest

 

 

 

 

 

 

 

 

 

 

 

(341

)

(341

)

Acquisitions and disposal of noncontrolling interest

 

 

 

 

(868

)

 

 

 

 

 

(868

)

(1,629

)

(2,497

)

Capitalization of noncontrolling interest advances

 

 

 

 

 

 

 

 

 

 

 

106

 

106

 

Merger of Valepar

 

 

 

3,692

 

 

 

 

 

 

 

3,692

 

 

3,692

 

Balance at September 30, 2017

 

77,300

 

50

 

3,692

 

(2,738

)

11,634

 

(2,746

)

(4,240

)

44,514

 

15,094

 

142,560

 

4,671

 

147,231

 

 

The accompanying notes are an integral part of these interim financial statements.

 

11



Table of Contents

 

 

Value Added Statement

In millions of Brazilian Reais

 

 

 

Consolidated

 

Parent company

 

 

 

Nine-month period ended September 30,

 

 

 

2018

 

2017

 

2018

 

2017

 

Generation of value added from continuing operations

 

 

 

 

 

 

 

 

 

Gross revenue

 

 

 

 

 

 

 

 

 

Revenue from products and services

 

98,168

 

79,771

 

57,701

 

47,793

 

Impairment and other results on non-current assets

 

(749

)

345

 

(305

)

(326

)

Revenue from the construction of own assets

 

8,271

 

4,657

 

5,302

 

4,165

 

Expected credit losses

 

(10

)

(19

)

(5

)

6

 

Other revenues

 

7,462

 

396

 

3,238

 

313

 

Less:

 

 

 

 

 

 

 

 

 

Acquisition of products

 

(1,228

)

(1,483

)

(534

)

(516

)

Material, service and maintenance

 

(24,918

)

(19,353

)

(13,973

)

(12,183

)

Oil and gas

 

(4,051

)

(3,015

)

(2,640

)

(2,074

)

Energy

 

(2,497

)

(2,226

)

(1,271

)

(1,057

)

Freight

 

(11,414

)

(7,374

)

(112

)

(81

)

Impairment and other results in associates and joint ventures

 

(1,671

)

(379

)

(1,671

)

(370

)

Impairment of discontinued operations

 

 

 

 

(1,004

)

Other costs and expenses

 

(9,627

)

(4,582

)

(5,979

)

(763

)

Gross value added

 

57,736

 

46,738

 

39,751

 

33,903

 

Depreciation, amortization and depletion

 

(9,322

)

(8,674

)

(4,464

)

(4,124

)

Net value added

 

48,414

 

38,064

 

35,287

 

29,779

 

 

 

 

 

 

 

 

 

 

 

Received from third parties

 

 

 

 

 

 

 

 

 

Equity results from entities

 

584

 

509

 

4,688

 

4,345

 

Equity results from descontinued operations

 

 

 

 

1,004

 

Financial income

 

1,114

 

1,054

 

209

 

302

 

Monetary and exchange variation of assets

 

2,087

 

(276

)

2,746

 

(404

)

Total value added from continuing operations to be distributed

 

52,199

 

39,351

 

42,930

 

35,026

 

Value added from discontinued operations to be distributed

 

63

 

482

 

 

 

Total value added to be distributed

 

52,262

 

39,833

 

42,930

 

35,026